Letter of Credit Documents – Page 3 – Letter of Credit Consultancy Services

What Does “Made Out to the Order of” Mean in a Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, How to Work With a Letter of Credit, Letter of Credit Documents 24 February 20196 April 2019Negotiable Bill of Lading, Non-Negotiable Transport Documents, Straight Bill of Lading, To Order

Majority of the letters of credits are asking for a bill of lading which must be issued made out to the order of the issuing bank.

This condition indicated under field “46A – Documents Required” for the letters of credit that are issued in a swift format.

In simple words bills of lading can be classified under two groups: Negotiable bills of lading and non-negotiable bill of lading. Non-negotiable bills of lading also known as sea waybills.

Negotiable bills of lading can also be classified under two main groups. Negotiable bills of lading and straight bills of lading.

Negotiable Bills of Lading: Negotiable bills of lading are the ones that have been issued “to order” or “to order of a named party”. If bill of lading has been issued in a negotiable form, then the buyer of the goods need to surrender at least one original bill of lading to the carrier at the port of discharge. In this scenario bill of lading must be endorsed properly.
Straight Bills of Lading: Straight bills of lading are the ones that have been issued in a way to consigned a named party. If bill of lading is issued in a non-negotiable form, then the buyer can get the goods either by,
- surrendering at least one original bill of lading to the carrier at the port of discharge or
- in accordance with rules of the national law at the port of discharge which may accept the delivery of the goods to the buyer against proof of identity.

Both “to order” and “to order of a named party” statements make a bill of lading a negotiable bill of lading.

Letter of Credit Examples:

Example of to order and blank endorsed bill of lading: Full set signed clean on board ocean bills of lading made out to order and blank endorsed marked ‘freight prepaid’ and notify Import Bank of India indicating letter of credit number.
Example of made out to order of bill of lading: Full set of original clean on board bill of lading issued to the order of Arab Bank PLC Algeria notify applicant marked freight prepaid.

Document Issued or Countersigned by the Applicant: What are the Risks?

Ozgur Eker (CDCS) How to Work With a Letter of Credit, Letter of Credit Documents 21 February 20196 April 2019Field 42M: Mixed Payment, Letter of Credit Documents, Letter of Credit Risks

What are the risks of a document which is to be issued, signed or countersigned by the applicant in a letter of credit transaction?

In some occasions importers would like to divide letter of credit payments into two or three parts in order to make sure that they will be receiving ordered goods in proper condition.

We call it mixed payments under letters of credit.

Mixed payments is used extensively in bigger projects such as capital machinery sales, construction plant installations etc.

On the below example I will be demonstrating a possible scenario as follows:

An exporter and importer have signed a sale contract which is stating that the payment will be done by an irrevocable letter of credit for 100% of the contract amount.

90% of letter of credit amount will be paid at sight against complying shipping documents.
10% of letter of credit value will be paid after the importer accepts the quality of goods by presentation of the installation certificate which is issued and signed by the authorized officers of the importer.

Letters of credit issued with similar conditions as stated above may bring some uncertainties to the exporters, mainly because of the fact that they may not be able to secure their balance payment, which is payable after the acceptance of the goods by the importers.

Exporters may find these clauses confusing and risky. They may want to know what would be their risks under these kinds of letters of credit?

In order to answer this question properly once again we should check ICC’s view.

ICC banking commission explains their stance in this regard at the latest version of the International Standard Banking Practices publication which is known as ISBP 745.

ISBP 745 states that “a credit or any amendment thereto should not require presentation of a document that is to be issued, signed or countersigned by the applicant.”

On the above example 10% of the balance payment requires presentation of a document issued and signed by the applicant, which is openly against the ICC’s stance.

Beneficiaries should remove such clauses from the letters of credit via amendments. If they fail to do so, they may increase their non-payment risk of the balanced payment.

Presentation – Letter of Credit Documents

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Proforma Invoice

In international trade transactions, a proforma invoice is a trade document which states a commitment from the seller (exporter) to sell goods to the buyer (importer) at specified conditions.
A proforma invoice is not a valid invoice in terms of accounting.
Proforma invoices are widely used in today’s international trade transactions in substitution of sales contracts.
For detailed information please visit our proforma invoice page.

Commercial Invoice

Commercial invoice is a type trade document which is used mostly in international trade transactions.
It is a compulsory document that is requested by customs to determine true value of the imported goods, for assessment of duties and taxes.
The description of the goods, services or performance in the invoice must correspond with the description in the letter of credit.
For detailed information please visit our commercial invoice page.

International Sales Contract

Contract of sale is defined as “formal contract by which a seller agrees to sell and a
buyer agrees to buy, under certain terms and conditions spelled out in writing in the
document signed by both parties.
Also called agreement of sale, contract for sale, sale agreement, or sale contract.
A sales contract can cover any kind of sales action such as sales of intellectual
property rights, sales of real estate etc… We will be focusing only on international
contracts for sale of goods.
For detailed information please visit our international sales contract page.

Packing List

Packing list, is an international trade document, used to identify details of the shipment
in terms of packaging.
Packing list normally should not disclose any financial information regarding the shipment such as the total amount of the cargo, unit price of the items or payment terms.
By adding details of the weight you can use a packing list as a weight list or weight certificate without any problem.
For detailed information please visit our packing list page.

Bill of Exchange / Draft

Bill of exchange and draft have the same meaning and it is a financial document.
Bill of exchange defined as an unconditional order in writing, addressed by one person to
another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified specified person, person, or to bearer.
There are two main international law exist that govern the bill of exchange as a financial
instrument in international trade transactions. Bills of Exchange Act (1882) and Geneva
Conventions (1930).
For detailed information please visit our bill of exchange page.

Insurance Documents

Cargo insurance is defined as an insurance policy taken up to protect insurance
holder against loss of or damage to the goods during the transportation.
There are 3 main cargo insurance types available for sea and road shipments.
- Institute Cargo Clauses (A) => widest protection coverage
- Institute Cargo Clauses (B)
- Institute Cargo Clauses (C) => minimum insurance coverage
Institute Cargo Clauses (Air) used in air shipments.
For detailed information please visit our cargo insurance documents page.

Inspection Certificate

Pre-shipment inspection, PSI, is a part of supply chain management and an important and reliable quality control method for checking goods’ quality while clients buy from the suppliers.
Main objective objective of the inspection certificate is to satisfy the importer or the
government body that the goods are in conformity with the indicated specifications
on the sales contract or proforma invoice.
Inspections are important tools to reduce trade risks and avoid fraud.
For detailed information please visit our Inspection Certificate page.

Multimodal Bill of Lading

Both multimodal bills of lading are transport documents covering transportation completed by more than one mode of transport.
Multimodal bills of lading are mostly printed on standard forms supplied by International Federation of Freight Forwarders Associations (FIATA) .
Multimodal Bills of Lading and Combined Transport Bills of Lading has the same meaning and application in terms of letters of credit rules.
For detailed information please visit our Multimodal Bill of Lading page.

Bill of Lading

Bill of lading is a transport documents used in sea shipments.
A bill of lading is an instrument in writing, signed by a carrier or his agent, describing the freight so as to identify it, stating the name of the consignor. The terms of the contract for carriage, and agreeing or directing that the freight be delivered to the order or assigns of a specified person at a specified place.
Bills of lading fulfill three basic functions :
- bills of lading are receipts for the goods;
- bills of lading evidence the terms of the contract of carriage
- they are said to be “negotiable documents of title”
For detailed information please visit our Bill of Lading page.

Non-Negotiable Sea Waybill

Non-negotiable sea waybill or Non-Negotiable Bill of Lading is a transport document used in sea shipments.
A sea waybill is non-negotiable, which means that the consignee cannot endorse the sea waybill and transfer it to another person to take delivery delivery of the cargo.
Non-negotiable sea waybill is covered under article 21 of the UCP 600.
To comply with UCP 600 article 21, a non-negotiable sea waybill must appear to cover a port-to-port shipment but need not be titled “Non-negotiable Sea Waybill” or similar.
For detailed information please visit our Non-Negotiable Sea Waybill page

Charter Party Bill of Lading

Container transportation may not be suitable for some occasions such as bulk commodity trades and heavy lift/out of gauge movements. On these occasions, in which liner services could not be utilized, shippers may choose to hire a vessel as an alternative.
Hiring a vessel is called “Charter Party” in maritime terminology.
Transport document issued by the hiring party of the vessel, or charterer as we call them, is called “Charter Party Bill of Lading“.
Charter party bill of lading is covered under article 22 of the UCP 600.
For detailed information please visit our Charter Party Bill of Lading page

Air Transport Document

Air transport document or air waybill (AWB) is a transport document used in air shipments.
Air waybill is “the shipping document used for the transportation of air freight. It includes conditions, limitations of liability, shipping instructions, description of commodity, and applicable transportation charges.
Air transport document is not a document title of goods, which means that air waybill is a non-negotiable transport document.
If a letter of credit requires presentation of an air transport document covering an airport-to airport shipment, UCP 600 article 23 is applicable.
For detailed information please visit our Air Transport Document page.

Road Transport Document

Road transport document or road consignment note is a transport document used in land shipments.
Road transport document is “the shipping document used for the transportation of land
freight. Road transport document that confirms that the carrier (ie the road haulage company) has received the goods and that a contract of carriage exists between the trader and the carrier.
Road transport document is not a document title of goods, which means that road transport document is a non-negotiable transport document.
“CMR International Consignment Note” is the transport document created in standard forms according to CMR convention. CMR Convention is signed by most of the EUROPEAN countries.
For detailed information please visit our Road Transport Document page.

Rail Transport Document

Rail transport document or rail consignment note is a transport document used in
rail shipments. Rail consignment note confirms that the rail carrier has received the
goods and that a contract of carriage exists between trader and carrier.
Rail transport document is not a document title of goods, which means that rail
transport document is a non-negotiable transport document.
“CIM Rail Consignment Note” is the transport document created in standard forms
according to CIM convention rules. CIM Convention is signed by around 50
countries.
For detailed information please visit our Rail Transport Document page.

What are the Differences Between a Bill of Lading and a Charter Party Bill of Lading?

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Under the current letter of credit rules and international standard banking practices, if a letter of credit calls for a marine bill of lading, then banks do not accept a charter party bill of lading in lieu of a marine bill of lading.

On this article I will try to answer the question “Why a charter party bill of lading is not acceptable in place of a marine bill of lading?” by clarifying the main differences between each transport documents.

Differences Between a Charter Party Bill of Lading and Marine Bill of Lading:

Charter Party Clause: Charter party bill of lading contains a clause stating that it is subject to a charter party. Marine bill of lading does not contain such a clause or similar wording.

Signatures:

Marine bills of lading can be signed by;
- the carrier or a named agent for or on behalf of the carrier, or
- the master or a named agent for or on behalf of the master.
Charter party bills of lading can be signed by;
- the master or a named agent for or on behalf of the master, or
- the owner or a named agent for or on behalf of the owner, or
- the charterer or a named agent for or on behalf of the charterer.

Usage:

Charter party bills of lading will be used mainly for big bulk shipments such as 20.000 mtons of soybean transportation from a US port to a Chinese port.
Marine bills of lading mostly used for containerized cargo that is transported by regular line container vessels.

Examples of Charter Party Clauses:

Below indications could turn a marine bill of lading into a charter party bill of lading. (Source : www.commerzbank.com)

“Prepayable freight paid as per charter party dd. …”
“Freight payable as per charter party dd. …”
“Freight as agreed”
“Bill of lading to be used with charter parties”

What is Congenbill Bill of Lading?

Ozgur Eker (CDCS) Bill of Lading, Charter Party Bill of Lading, Letter of Credit Documents 1 December 20186 April 2019Bill of Lading, Charter Party Bill of Lading, Congenbill

Congenbill is a type of charter party bill of lading which is widely used in international transportation.

Congenbill 2007 is the latest version of standard charter party bill of lading which is issued and approved by the BIMCO’s Documentary Committee.

BIMCO is a well established international shipping association and its long form is also known as “The Baltic and International Maritime Council”.

Congenbill 2007

According to the UCP 600 rules a bill of lading which contains an indication that it is subject to a charter party will be classified as a charter party bill of lading. Congenbill 2007 Bill of Lading indicates on its face “To be used with charter parties”. This makes Congenbill 2007 a charter party bill of lading according to the letter of credit rules.
The Congenbill Charter Party Bill of Lading can be used wide range cargo that does not need special handling. Because of this reason it is one of the most popular Charter Party Bill of Lading (CPBL) in use.
Sample Congenbill 2007 bill of lading is reachable from this link.

There are other charter party bills of ladings that have been issued by BIMCO. These are specific charter party bills of lading suitable for limited niche charter party operations.

Some examples of specific charter party bills of lading issued by BIMCO:

AUSTWHEAT BILL
BIMCHEMVOYBILL 2008
CEMENTVOYBILL 2006
INTANKBILL 78
GRAINCONBILL

How to Determine Maturity Date if Letter of Credit States That Tenor of the L/C is 60 Days After Bill of Lading Issue Date?

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Maturity date is a term related to a time draft.

A time draft is a form of payment that is guaranteed by an issuing bank, but is not payable in full until a specified amount of time after it is received and accepted. (1)

The maturity date is a date on which a bill of exchange or deferred payment undertaking under a documentary credit is to be paid by the party assuming the undertaking. (2)

Determining the maturity date is an important concept especially when the letter of credit is available with a time draft.

Example: A letter of credit has been issued by an international bank’s branch in France states that the documentary credit is available by drafts payable at 60 days after bill of lading issue date.

The beneficiary has presented the bill of lading showing:

date of issue : 04.August.2014 and
shipped on board date : 01.August.2014.

How to determine the maturity date of the draft based on above information?

First of all we need to understand that whether there are any differences exist between the “bill of lading date” and the “bill of lading issue date”.

When we look at the ISBP 745 we understand that ICC Banking commission used these terms with the same meaning. As a result both “bill of lading date” and “bill of lading issue date” have the same meaning in terms of letter of credit rules.

Secondly we need to answer which date we should be using when determining the maturity date of the draft.

Should we use bill of lading issuance date or shipped on board date?

Once again we need to look at the ISBP 745 for the correct answer. ISBP 745 states that shipped on board date is deemed to be bill of lading date or bill of lading issue date with the following statement:

“When the tenor refers to, for example, 60 days after the bill of lading date, the on board date is deemed to be the bill of lading date even when the on board date is prior to or later than the date of issuance of the bill of lading.”

As a result we need to use shipped on board date when determining the maturity date of the draft even if the letter of credit states that tenor of the L/C is 60 days after bill of lading issue date.

On the above example shipped on board date is 01.August.2014 and tenor is 60 days after bill of lading issuance date.

We should accept shipped on board date as bill of lading issue date and should use it on calculation of the maturity date.

The maturity date is 30.September.2014.

Important Note: You should add 60 days to 01.August.2014. Remember you should exclude 01.August.2014 when counting 60 days.

Sources:

https://www.investopedia.com/terms/t/time-draft.asp
Documentary credits in practice, Reinhard Längerich, Second edition – 2009, Page: 304, Published by: Nordea

How to Determine Date of Shipment on an Air Transport Document?

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An air waybill is a document covering the carriage of goods by plane from one airport to another.

Date of shipment is one of the key definitions in a letter of credit transaction. It is used to determine

whether shipment made on time or not (in other words a late shipment has been effected or not),
whether documents presented within the presentation period or not (in other words a late presentation has been effected or not),
maturity date of the time draft,
maturity date of a deferred payment letter of credit.

Date of shipment can be determined in two ways on an air waybill.

Option 1 => There is no actual date of shipment notation on the air waybill:

The date of issuance of the air waybill will be deemed to be the date of shipment.

Option 2=> Air waybill indicates, by notation, the actual date of shipment: Notation date will be deemed to be the date of shipment as specified below:

Date of the actual date of shipment notation/stamp => this date will be deemed to be the date of shipment.

How to determine date of shipment on an Air Transport Document? — An air waybill with a separate actual date of shipment notation. The date of shipment on this air waybill is 15.05.2014 as indicated on the notation.

Freight Forwarder’s Bill of Lading Not Acceptable

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Some issuing banks add an additional condition to the letters of credit they have issued, indicating that freight forwarder’s bill of lading is not acceptable.

Why issuing banks disallow freight forwarder’s bill of lading?
What happens if issuing bank forbids presentation of a freight forwarder’s bill of lading under a letter of credit?

If an issuing bank wants to prohibit presentation of a freight forwarder’s bill of lading, can achieve this aim simply by adding a condition under field 47-A Additional Conditions.

Below you can find some example texts, disallowing presentation of freight forwarder’s bill of lading.

Sample Texts from Selected Letters of Credit

Forwarder’s bill of lading not acceptable.
Transport documents issued by freight forwarder are not acceptable.
Goods must be shipped through the nominated liner which will be advised by the applicant in a certified format with applicant’s seal, a copy of the same must be presented for negotiation and the bill of lading, (freight forwarder’s bill of lading is not acceptable) must evidence that the goods have been shipped on the liner specified therein.

Why issuing banks disallow freight forwarder’s bill of lading?

Issuing banks want to secure themselves as much as possible by requesting not a freight forwarder’s bill of lading, but a carrier’s bill of lading.

A carrier’s bill of lading, which is known as master bill of lading, give more security to the issuing banks comparing to freight forwarder’s bill of lading, which is known as house bill of lading.

What Does the Letter of Credit Rules Tell About Disallowing Freight Forwarder’s Bill of Lading?

UCP 600:

UCP 600 sub-article 14(l) states that

“A transport document may be issued by any party other than a carrier, owner, master or charterer provided that the transport document meets the requirements of articles 19, 20, 21, 22, 23 or 24 of these rules.”

UCP 600 sub-article 20(a) states that

a.A bill of lading, however named, must appear to:
i. indicate the name of the carrier and be signed by:
– the carrier or a named agent for or on behalf of the carrier, or
– the master or a named agent for or on behalf of the master.

ISBP 745:

ISBP 745 states that

“A stipulation in a credit that “Freight Forwarder’s Bills of Lading are not acceptable” or “House Bills of Lading are not acceptable” or words of similar effect has no meaning in the context of the title, format, content or signing of a bill of lading unless the credit provides specific requirements detailing how the bill of lading is to be issued and signed. In the absence of these requirements, such a stipulation is to be disregarded, and the bill of lading presented is to be examined according to the requirements of UCP 600 article 20″.

According to latest version of international standard banking practices, “Freight Forwarder’s Bills of Lading are not acceptable” or “House Bills of Lading are not acceptable” stipulations in a letter of credit has no meaning unless banks defines how the bill of lading is to be issued and signed.
If no specific requirements have been mentioned in the letter of credit in regards to issuance and signature of the bill of lading, then banks, nominated bank, confirming bank and issuing bank, have to disregard such a stipulation.

Official Opinion R643 / TA669rev – 2005-2008:
If a transport document states “freight forwarder bills of lading are not acceptable” or “house bills of lading not acceptable”, can the freight forwarder or agent sign the bill of lading according to the requirements expressed in sub-article 20 (a) (i)?
Query
ICC Opinion TA 572 – Issue No. 1 (October 2004) describes the situation in which the documentary credit states that “Transport document issued by Freight Forwarder not acceptable”. The conclusion of the Opinion was that ” … the bank would be obliged to accept a bill of lading that was signed ‘as carrier’ irrespective of any knowledge it may have as to the capacity of the issuer” – i.e., even when the transport document was entitled “FBL BIFA Negotiable FIATA Multimodal Transport Bill of Lading”.
a-The above Opinion was given subject to UCP 500, and we ask you kindly to inform us if the same position would apply under UCP 600.
b-Also kindly advise if the conclusion above would be the same had the documentary credit stated that “House bill of lading not acceptable” or similar.
Analysis
One of the reasons behind conditions such as “freight forwarder bills of lading are not acceptable” or “house bills of lading not acceptable” is to require the issuance of a bill of lading by the carrier, albeit that the freight forwarder or agent could sign the bill of lading according to the requirements expressed in sub-article 20 (a) (i). If a freight forwarder or agent signs as carrier, the bill of lading becomes a carrier document.
Conclusion
The same position applies under UCP 600.
If the credit states “house bill of lading not acceptable” or similar, the same position will apply.

What is a Freight Forwarder’s Bill of Lading?

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A freight forwarder’s bill of lading is a transport document which is issued by a freight forwarder.

It is also known as a house bill of lading.

What Does Freight Forwarder’s Bill of Lading Mean in Export and Import Businesses?

A freight forwarder’s bill of lading (FBL) is a transport document, which is used in sea shipments and multimodal shipments, issued and signed by a freight forwarder, generally on a freight forwarder’s bill of lading format, evidences the terms and conditions of the carriage of goods as specified by the freight forwarder.

What are the Main Features of a Freight Forwarder’s Bill of Lading (FBL)?

A freight forwarder’s bill of lading generally issued on a freight forwarder’s bill of lading format. It is also known as house bill of lading (HBL).
A freight forwarder’s bill of lading issued and signed by a forwarder without indicating any signing authority either a carrier or as agent of the carrier. In some occasions forwarder companies sign FBLs “as carrier”, especially when their clients require a letter of credit compliant bill of lading.
A freight forwarder’s bill of lading (FBL) may or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
A freight forwarder’s bill of lading is signed by the forwarder and states the terms and conditions of carriage for the forwarder company’s perspective. FBL does not contain actual carrier’s carriage contract, as a result shipper and consignee stated on the house bill of lading is not a direct participant of the carriage contract indicated on the master bill of lading.

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Master Bill of Lading	House Bill of Lading
Master Bill of Lading: Issued by the actual carrier, such as MSC, Maersk, Yang Ming Lines, etc.	House Bill of Lading: Issued by the forwarder company, such as XYZ Forwarding Ltd, etc.
Master Bill of Lading: Signed either by the carrier or an agent of the carrier.	House Bill of Lading: Signed by the forwarding company without any agency indication of the carrier.
Master Bill of Lading: Issued on a pre-printed form of an actual carrier's bill of lading.	House Bill of Lading: Issued on a pre-printed form of a forwarder company's bill of lading.
Master Bill of Lading: Always subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.	House Bill of Lading: May or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Master Bill of Lading: States the terms and conditions of the carriage, as a result consignee may have protection in case the goods are damaged or lost in transit.	House Bill of Lading: States the terms and conditions of the forwarding company, as a result consignee will not be having a legal protection in case the goods are damaged or lost in transit.
Master Bill of Lading: States actual carrier's bill of lading number.	House Bill of Lading: States forwarder company's bill of lading number.

Forwarder’s bill of lading is also known as house bill of lading.

Is Freight Forwarder’s Bill of Lading Acceptable Under Letters of Credit?

According to the letter of credit rules, unless otherwise indicated in a specific letter of credit, it is possible to present a freight forwarders bill of lading.

But the bill of lading must be issued in accordance with the UCP 600 rules.

As a result if a letter of credit requests a marine bill of lading, it is possible to present a carrier’s bill of lading, forwarder’s bill of lading (house bill of lading in other words) or multi modal bill of lading without any problem, as long as the presented document conforms the respected letter of credit rules.

Important Note: It is not possible to present a charter party bill of lading if a letter of credit requests a marine bill of lading.

Letter of Credit Example with Freight Forwarder’s Bill of Lading Presentation:

Letter of Credit Sample: Field: 46A: Documents Required

Full set of original clean on board ocean bills of lading made out to the order of issuing bank marked freight to be collected and notify applicant indicating this documentary credit number and name, address, telephone no of the carrying vessels agent at the port of discharge.

Option 1: Freight Forwarder’s bill of lading presented which is signed as carrier

The exporter presented a freight forwarder’s bill of lading, which is signed “as carrier” by the freight forwarder company.

This kind of signature, identifying freight forwarder company as a carrier and signed by the same company as carrier, is acceptable in terms of letter of credit rules.

If you need further information in regards to letter of credit rules on bill of lading issuance, please visit my bill of lading page.

Option 2: Freight Forwarder’s bill of lading presented which is signed as agent for the carrier

The exporter presented a freight forwarder’s bill of lading, which is signed “as agent for carrier” by the freight forwarder company.

This kind of signature, identifying freight forwarder company as agent for the carrier and signed by the same company as agent on behalf of the carrier, is acceptable in terms of letter of credit rules.

If you need further information in regards to letter of credit rules on bill of lading issuance, please visit my bill of lading page.

Important Note: If Freight Forwarder’s Bill of lading is not signed one of the methods explained above, then banks may raise a discrepancy called “Carrier Not Identified or Bill of Lading not Signed as per UCP“.

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

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Understanding the differences between a master bill of lading and a house bill of lading in export and import transactions.

What Does a Master Bill of Lading Mean in Export and Import Businesses?

A master bill of lading (MBL) is a transport document, which is used in sea shipments, issued and signed by a sea cargo carrier or its agent, generally on a pre-printed carrier’s bill of lading format, evidences the terms and conditions of the carriage of goods between port of loading to port of discharge.

What Are the Main Features of a Master Bill of Lading (MBL)?

A master bill of lading generally issued on a pre-printed bill of lading form of an issuer carrier.
A master bill of lading issued and signed by a carrier or an agent on behalf of the carrier.
A master bill of lading (MBL) is issued subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
A master bill of lading is signed by the actual carrier and states the terms and conditions of the carriage, as a result consignee may have a better protection in case the goods are damaged or lost in transit.

Figure 1: Master Bill of Lading Sample (Carrier: Maersk Line)

What Does a House Bill of Lading Mean in Export and Import Businesses?

A house bill of lading (HBL) is a transport document, which is used in sea shipments, issued and signed by a freight forwarder, generally on a freight forwarder’s bill of lading format, evidences the terms and conditions of the carriage of goods as specified by the freight forwarder.

What Are the Main Features of a House Bill of Lading (HBL)?

A house bill of lading generally issued on a freight forwarder’s bill of lading format.
A house bill of lading issued and signed by a forwarder without indicating any signing authority either carrier or as agent of the carrier. In some occasions forwarder companies sign HBLs “as carrier”, especially when their clients require a bill of lading compliant to the letter of credit conditions.
A house bill of lading (HBL) may or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
House bill of lading is signed by the forwarder, and it states the terms and conditions of carriage for the forwarder company’s perspective. A house bill of lading does not contain actual carrier’s carriage contract, as a result the shipper stated on the house bill of lading is not identified in the actual carrier’s contract.

Figure 2: House Bill of Lading Sample

What are the Differences Between MBL (Master Bill of Lading) and HBL (House Bill of Lading)?

Master Bill of Lading	House Bill of Lading
Master Bill of Lading: Issued by the actual carrier, such as MSC, Maersk, Yang Ming Lines, etc.	House Bill of Lading: Issued by the forwarder company, such as XYZ Forwarding Ltd, etc.
Master Bill of Lading: Signed either by the carrier or an agent of the carrier.	House Bill of Lading: Signed by the forwarding company without any agency indication of the carrier.
Master Bill of Lading: Issued on a pre-printed form of an actual carrier's bill of lading.	House Bill of Lading: Issued on a pre-printed form of a forwarder company's bill of lading.
Master Bill of Lading: Always subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.	House Bill of Lading: May or may not be subject to Hague Rules, The Hague-Visby Rules and US COGSA (US Carriage of Goods by Sea Act 1936. ) etc.
Master Bill of Lading: States the terms and conditions of the carriage, as a result consignee may have protection in case the goods are damaged or lost in transit.	House Bill of Lading: States the terms and conditions of the forwarding company, as a result consignee will not be having a legal protection in case the goods are damaged or lost in transit.
Master Bill of Lading: States actual carrier's bill of lading number.	House Bill of Lading: States forwarder company's bill of lading number.